investments


Neville Johnson

Bespoke furniture designer, manufacturer & retailer

March 2008

£4.3 million investment

Exited in May 2014

www.nevillejohnson.co.uk

View case study

“The partners' genuine enthusiasm and passion for our company inspires confidence in the decisions we make.”

Nigel Pailing, CEO | Neville Johnson

The business...

At the time of our investment Neville Johnson was focussed on the manufacture and installation of high-quailty bespoke home-office furniture and fitted bedroom furniture. It was one of the leading players in its market sector, with company sales of £17 million, and had a deserved reputation for the quality of its product and service.

The deal...

KCP invested £4.3 million for a 58% shareholding, raising £5.3 million of debt as part of the acquisition financing. The incumbent management took a 40% shareholding.

The Company was very soon hit by the financial crash of 2008/9. However, our early assumption regarding the resilience of Neville Johnson's specific market proved to be correct and the Company experienced only a relatively mild downturn with sales falling by just 6%.

From that point on, the Company recovered rapidly and with our assistance expanded its business by establishing a new product area of staircase renovations and renewals as well as acquiring Tom Howley, a small high-quality kitchen manufacturer and retailer, out of administration.

At the time of the acquisition, Tom Howley traded from three showrooms and had sales of only £1.5 million. The business was quickly turned around and the sales run-rate at the time of exit in 2014 was £12 million from six showrooms with a long-term potential of thirty showrooms.

KCP value-add...

During our investment we:

  • Identified and appointed a high calibre industry Chairman, who has a wealth of retailing experience. He was retained by Alcuin following the sale
  • Supported and nurtured the business through the downturn and encouraged the management team to focus on growing the business through the addition of new product sectors. We identified and negotiated the acquisition of Tom Howley which proved to be transformational
  • Managed the exit process, appointing KPMG as advisors, and achieved a very successful secondary buyout which enabled the management team to benefit from the continued growth of the business

Exit...

The business was sold for £21.6 million in a secondary management buyout to Alcuin Private Equity in May 2014. At the time, the business was making £3.3 million EBITDA from sales of £33 million and with a very strong growth trajectory on the back of the Tom Howley showroom rollout and continued growth in staircases.

Key highlights...

  • The investment in both Neville Johnson and Tom Howley brands enabled sales to double to over £30 million despite trading through a recession
  • The value of the company increased by 100% during our period of ownership
  • Staff numbers increased significantly as a result of the growth, with over 100 additional employees joining the team during our period of involvement